Question

Access Organics, Inc., hired Andy Hernandez to sell organic produce. Later, Hernandez signed an agreement not to compete with Access for two years following the termination of his employment. He did not receive a pay increase or any other new benefits in return for signing the agreement. When Access encountered financial trouble, Hernandez left and began to compete with his former employer. Access filed a lawsuit against Hernandez. Is the noncompete agreement enforceable?

Answer 1

Answer: The Non Compete is NOT Enforceable.

Explanation:

An Agreement not to compete with your previous company is a RESTRICTIVE covenant that was generally introduced to ensure that Upper and Middle Management who were generally privy to Trade Secrets in an Organization do not take that information somewhere else and use it against that old company usually in exchange for better compensation packages.

Hernandez joined Access Organics and regrettably was not given a pay increase or any other special considerations. This is very relevant.

For a Non-compete to hold relevance especially if it is signed AFTER an employee has already being working in an organization, there needs to be SUFFICIENT Considerations that gave the employee better terms such as more job security or better benefits as a result of signing said agreement.

Andy Hernandez received no such benefits in return for signing the agreement and so the Non-compete Agreement lacks said Sufficient Considerations.

The Non-compete is therefore NOT ENFORCEABLE.

It is worthy of note that in the actual case, the Judge ruled in favor of of Andy Hernandez.

If you require further clarification do react or comment.

Answer 2

Answer:

Yes, a valid non-compete is enforceable as a state law once one party violates is provision.

Explanation:

If the non compete did not categorically state that Hernandez will receive a pay increase or any other new benefits in return for signing the agreement and yet he endorsed it, going against the agreement not to compete with Access for two years following the termination of his employment is a clear case of violation.

Penalty for violating a non compete include payment for damages. In this case, Access Organics Inc. could also file  lawsuit against Hernandez for both money damages and an injunction.